February 15th, 2020
I know, you’re asking right about now what the heck are brackets & limits in the context of negotiating tips?
And let me be the first to share with you that brackets work on us virtually every time?
Endless Possibilities for this Deal Making Strategy
When it comes to sending bracketing messages, the possibilities seem endless. Often that bracket is established and conveyed in a subtle manner, almost concealed or cloaked in a manner that people are prone to miss. It is often bundled in what we’ll call a product, service or sales presentation. Examples often provide the best explanation of a negotiating technique. That’s certainly true of this brackets and limits package.
Example #1: A customer objects to the price on some lumber they hope to purchase. They explain to the clerk that they need a discount because they have a limited budget. That budgeted amount has to enable them to purchase the lumber, but also the paint and hardware. The price limit is set for the entire package.
Example #2: A home buyer shares with their agent that they would like to buy the house they have recently viewed. They further indicate that they’ve worked out an affordable budget for acquiring the property and for completing some much-needed painting, repairs and modifications to that property. With the cost of repairs in mind, they could only offer $____ for the property.
Example #3: An equipment purchaser is in negotiations with a dealer to purchase a machine that he needs. The price negotiations seem to be going well until the purchaser shares that he is limited in what he can pay the dealer because he has to pay additional to have the item delivered and modified for his specific use.
What does each of these examples have in common? Each has a purchaser willing to acquire an item but only if the seller ‘helps’ them pay for ancillary items. They ask for a price reduction so they can spend those saved funds on a necessary expenditure somewhere else. See how brackets & limits work?
It is quite common for the customer to take their problems and attempt to pass them on to someone else by using a package bracket. In these cases, the problem is something else the buyer wants to purchase and the seller is asked to fund the buyer’s extra items by providing a price reduction.
How do good negotiators handle Brackets & Limits?
- Anticipate that such package brackets might be presented. They are also capable of tactfully rejecting any obligation that the buyer might attempt to shift their way. They don’t take on someone else’s problems, however logical they may be presented.
- Know that the buyer is already invested in this negotiation and will probably not back out if a seller concession is not forthcoming. They extend the discussions. The longer the negotiations go on the more likely the bracket package will be abandoned.
- Can typically put the ‘deal together’ by offering/giving a minor, low cost concession. It shows that they’re willing to help their opponent stay within their brackets & limits package. It is often more important to say you have achieved a concession than to focus on the amount of the concession.
- Sometimes you have to remember “The word NO is a complete sentence”; in other words, delving into explaining the “why” of your NO just opens yourself up to further concessions
Brackets and Limits: We need to set and communicate more on our behalf and we need to challenge those we hear from others.
It’s all part of the bargaining as we KEEP Negotiating. Where to find more negotiating tips
Wikipedia: “Supply and Demand” In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.